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What can the construction industry learn from the Gatwick drone disruption

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Construction risks surrounding drone use

23 January 2019

Drone-related activity near airports has increased calls for further regulation, which may affect developers’ and contractors’ insurance

At about 9pm on Wednesday 19 December, drone activity brought London’s Gatwick airport to a standstill. Two drones were reported hovering “over the perimeter fence and into where the runway operates from”.

Flights were grounded until 3am the following morning. But runways closed again less than an hour after reopening, after further drone sightings. Apparently, these incursions had been deliberate.

A few days later, on 8 January 2019, the Metropolitan Police received reports of a sighting of a drone near the runway of Heathrow Airport. All flights from Heathrow were grounded for more than an hour.

The recent disruption at Gatwick and Heathrow has raised the possibility of law changes and further restrictions on drone use. These potential changes apply as much to industry – including the construction sector - as they do to individual drone owners.

Why should contractors and developers be concerned about the Gatwick and Heathrow drone incidents?

Construction-related operations involving drones need to be monitored carefully, especially in the current climate. Their use is being scrutinised closely, and tougher regulations and further restrictions are being introduced.

Contractors and developers that fail to stay up to date with legal and regulatory changes could end up with significant legal and financial liabilities even if they think they are following the rules.

The incidents at Gatwick and Heathrow appear to have been caused by drones being flown specifically to cause widespread disruption to flights. However, they do highlight that in order to obtain the appropriate construction insurance – and to stay on the right side of the law - construction companies must maintain an awareness of the issues surrounding such events.

How drones are used by the construction industry

Forward-looking construction firms are embracing new technology to reduce costs and increase safety. Unmanned aerial vehicles (UAVs; known commonly as drones) are being deployed increasingly and for many different purposes, from site inspections to providing the ‘eyes’ for unmanned machinery. The prevalence of drone use means that UAVs must now form part of a company’s construction risk assessment.

In the early phase of drone use, it was more typical for clients to sub-contract the operation of a drone and, as a consequence, compliance with the Civil Aviation Authority (CAA) regulations, including aviation Insurance, had to be met by the operator.

From an insurance perspective, contractors and developers therefore relied on having their aviation exclusion deleted from their third party liability (TPL) policy for their contingent liability.

However, clients are now more inclined to operate the drones themselves and as a consequence their TPL insurance is unlikely to meet the CAA Insurance regulations. This brings its own set of risks, along with insurance requirements that are driven by parameters set by the CAA.

The construction industry has many different uses for drones, so much so that they now need to be considered during the construction risk management process. Examples of how UAVs are used by contractors and developers include the following:

- Building: Roof maintenance surveys. A side benefit of drone use in this respect is reduced health and safety exposure to employees

- Overhead transmission lines: UAVs are used during the monitoring maintenance process

What are the current drone regulations for commercial operators?

Drone users are required to meet legal benchmarks and adhere to CAA regulations. Regulations vary, depending on size, and whether a drone is being used for commercial or recreational purposes.

A drone with an operating mass of less than 20kg is considered by regulators to be a small unmanned aircraft. Drones in themselves are a form of construction risk. Currently, anyone using a small commercial drone needs to be aware of CAA regulations relating to the following:

Small unmanned aircraft. They should also make themselves aware of regulations related to small unmanned surveillance aircraft

Height restrictions on flights: Flying above 400ft is against the rules

Restrictions on flights over or near aerodromes: It is illegal to fly a drone within 1km of an airport or airfield boundary in the UK

Endangering safety of any person or property.

Changes in UAV regulations for commercial drone ownership and use

On 30 May 2018, a set of regulations related to drone use were announced. Some came into force on 30 July 2018. Others will come into effect on 30 November 2019.

On 7 January 2019, a second set of rules was introduced.

When performing a construction site risk assessment, insureds should be aware that breaching the new rules (or indeed the old ones) will create construction insurance liabilities for drone operators/contractors. Notable 2018 and 2019 UAV regulations include:

Introduced in July 2018:

Drones banned from flying above 400ft and encroaching within 1km of airport boundaries. Penalties include: Unlimited fine; five years in prison.

To come into effect November 2019:

Registration with the CAA will be compulsory for operators of UAVs weighing between 250g and 20kg. Registered drone users will have to take an online competency test. Users who fail to register and sit the tests will face fines of up to £1,000.

8 January 2019 drone rules

- Airport exclusion zone extended to the current air traffic zone around airports, which is approximately a 5km (3.1 miles) radius, with additional extensions from runway ends. Endangering the safety of an aircraft is a criminal offence that can carry a prison sentence of up to five years.

- The authorities will utilise new technologies such as geo-fencing to detect and repel drones from sites like airports and prisons.

- Police will be given additional powers to land drones. Officers will require users to produce appropriate documentation.

- Where a serious offence has been committed, officers will be able to search premises and seize UAVs, including any electronic data stored in them.

- Fines of up to £100 will be issued by police for minor offences. These include failing to comply with an officer when instructed to land a UAV or not showing the registration required to operate a drone.

Importantly for construction companies, if a liability arises following a breach of the regulations, TPL insurance will not cover the consequences. Even if the regulations are observed, if the loss arises from a non-damage event, such as with Gatwick, it is unlikely that traditional TPL insurance will provide cover either.

How your construction insurance broker can help

At the time of writing, it is unclear how the rules are going to be implemented and applied. However, specialist construction insurance brokers can advise about all aspects of coverage and risk management related to drone use, including construction public liability insurance. Issues your broker can advise on include:

Insurance checks that should be made when engaging a subcontractor to perform aerial activities

How to stay abreast of law changes

Where to find advice about safety issues

Limitations of cover under TPL insurance

Adequacy of limits

How to obtain aviation risk management advice

Breach of privacy.

A broker can also advise on whether aviation insurance is required and, if it is already in place, whether it is adequate in terms of TPL coverage. This would come into play if any drone-related damage is caused near airport infrastructure.

For advice on how the law (or CAA regulations) will apply to construction companies, specialist legal advice should be sought.

TALK TO A CONSTRUCTION INSURANCE EXPERT

For further advice about drone ownership and operation, along with all forms of contractor indemnity insurance and construction liability insurance, please contact Joe Charczenko of Construction Risk Partners at jcharczenko@constructionriskpartners.com.

Jardine Lloyd Thompson Group plc

Jardine Lloyd Thompson Group plc, incorporated and registered in England and Wales. Registered Office at The St Botolph Building, 138 Houndsditch, London, EC3A 7AW. Registered number 1679424. Jardine Lloyd Thompson Group plc is a holding company, some of whose subsidiaries are authorised and regulated by the Financial Conduct Authority.